From unwarranted gloom to wild optimism; Nintendo inspires strangely strong emotions in the industry, but we could all do with a dose of balance

After a few years of writing articles cautioning people not to write Nintendo off just yet, it feels most peculiar to type these words, but here we go: could we all just calm down a little bit about Nintendo? Yes, the Switch is off to a very solid start; and yes, Zelda: Breath of the Wild is a damned near perfect video game - but the swing of the pendulum away from the doom and gloom of the Wii U's final months is now threatening to bring us into breathless, giddy over-optimism that the company and its new platform may find it very hard to live up to.

There are plenty of examples out there - perhaps the most egregious is the pronouncement by GameStop's senior director of merchandising, Eric Bright, that the launch numbers for Switch suggest that its sales could "eclipse the Wii", but he's far from alone in this general sentiment. Nintendo itself has lifted its 2017 shipments estimates markedly, which gives something of an official seal of approval to this change in tone, but it's other commentators who are really talking up Switch to an extent that throws caution to the wind.

A little less than a month ago, before the launch, articles on this site by both myself and Christopher Dring concluded, fairly uncontroversially, that the real test for Switch would not come until the end of the year and that any solid assessment of the console's performance could not be made until we reach that point. That view would have held true had Switch underperformed at launch; it ought to hold equally true in the wake of the great launch the console has actually enjoyed. Nintendo has come around the first corner in style, but this is a very, very long race.

"The reality is that Switch could be a significant commercial success without troubling the track record of the Wii, and establishing a narrative which invites constant comparisons from this early stage is not in anyone's best interest"

When you come down to brass tacks, the reality is that we haven't learned a lot from the launch of Switch. The console sold strongly around the world, but was supply-constrained, so all we can actually take away from its launch sales is that it's appealed well to the core market of Nintendo fans. Zelda: Breath of the Wild has received rave reviews and has one of the strongest attach rates ever seen for a non-bundled title. What we learn from this is that core Nintendo fans are hugely enthused about new Zelda games (hold the front page) and that Nintendo's game development talent is firing on all cylinders at the moment. This latter fact is important, but shouldn't come as a surprise to anyone who's been following the company in recent years; Nintendo's software has arguably been going through a golden age that was tragically underserved by the Wii U's hardware and marketing.

In actual data terms, then, there's not a lot we can take away from the launch of Switch. It didn't underperform, which is good news of course, but supply constraints mean we don't know exactly how much demand existed and what proportion of it was satisfied. It's important to note that one thing we didn't see is a repeat of the Wii's launch pattern; Switch has sold extremely well to core game fans who bought it to play Zelda, and as yet there's nothing to suggest that it's succeeded in enticing the kind of casual audiences who drove the Wii's sales.

Ultimately, all of that information - data on demand, on demographics and so on - is data we won't see until several months down the line; launches like Mario Kart 8.5 and Splatoon 2 will be big tests for the system, but it's Christmas and the arrival of Mario Odyssey that'll allow us to finally start to talk with real confidence about the performance and future prospects for Switch. The setting up of elevated expectations for the console at this early stage only creates potential disappointment down the line; while Nintendo would no doubt love to recreate the success of its most successful home console to date, the reality is that Switch could be a significant commercial success without troubling the track record of the Wii, and establishing a narrative which invites constant comparisons from this early stage is not in anyone's best interest.

None of this, it should be added, detracts from the achievement the Switch launch represents. While the data the launch has provided us with is simply insufficient to underpin any serious or worthwhile forecasts for the system, the intangible aspects of the launch are unquestionably positive. Word of mouth for Switch is almost universally great, some minor hardware-related teething problems aside; the universal acclaim for Zelda, meanwhile, feels almost unprecedented. Consumer sentiment is hard to quantify, and it's harder yet to guess at which groups or demographics have been touched by this positivity, but it's fair to say that Nintendo has already placed itself on the path to recovery from the hugely disappointing and ultimately doomed Wii U.

"There's an oft-repeated fallacy that Nintendo deliberately manipulates supply figures to create artificial demand... the rather less moustache-twirling truth being that the company has often simply not been very good at predicting demand"

If you're keen to keep an eye on the data points that will really be meaningful for Switch in the coming months, though, here's what to watch out for. Firstly, Nintendo's ability to stick to its launch schedule and keep a consistent flow of software coming for the new system is vital; if major titles start to slip (Splatoon and Mario Odyssey being the really big ones) then it's a big concern. Alongside that, the movements of major publishers with regard to Switch support are also worth watching. One interesting sentiment that I've seen from a lot of new Switch owners is that they love the form factor of the machine, and conversations over which other games they'd like to play on it have been commonplace; if that idea is making its way into conversations at third-party publishers, then combined with the confidence resulting from a solid launch, it should cause an uptick in third-party support for the system in the coming months.

The other thing to watch, of course, is demand for hardware shipments. Nintendo's intention in launching the Switch so early in the year was undoubtedly twofold; firstly, to allow it to build a solid software library ahead of its first Christmas (and, again assuming no delays, the system should have its biggest brands - Zelda, Mario, Splatoon and Mario Kart - all on the shelves by that point), and secondly, to allow it to spread out launch demand over a six to nine month period, so supply will be able to keep pace over Christmas. There's an oft-repeated fallacy that Nintendo deliberately manipulates supply figures to create artificial demand and buzz around its hardware; there's simply no evidence of that, with the rather less moustache-twirling truth being that the company has often simply not been very good at predicting demand or at being flexible with its manufacturing volumes. With Switch, it's trying to avoid both the excess demand for the Wii and the excess supply of the Wii U by launching earlier in the year.

That means we've got nine months of shipments to watch and evaluate - to see what audiences Nintendo is appealing to, whether demand remains high, and whether the launch of titles like Mario Kart and Splatoon 2 can really drive the console forward. Though there'll no doubt be crazy speculation around each set of numbers, it's the overall picture that's important, and it's only months of data that'll really give us a sense of where this console is going. Switch is off to a good start - perhaps even a great start - and like many people, I truly believe that the games industry is better off with a healthy, successful Nintendo competing strongly at its heart. Getting engaged in wildly optimistic speculation off the back of such meagre data, though, is no better than being a Nintendo doom-merchant; it's merely an error at the other end of the spectrum.

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Think Nintendo's reason for launching in March was the fiscal year more than anything (and they sacrificed four months of 3DS sales for them). Their challenge isn't 2017, its 2018. The machine will happily be sold out at retail until then. Getting to 10-12m units won't be a struggle, 20m and up will provide Nintendo with a success story. Wii sales aren't achievable for anyone.

Rob correctly identifies many of the long-term issues for Nintendo and the Switch. The acclaim for Zelda and the several million hardcore Nintendo fans have helped the Switch to a great start. In a few months, though, all of the most fervent Nintendo fans will have a Switch, and then Nintendo has to start winning over less devoted fans -- and perhaps, someday, people who don't even really care all that much about Nintendo but are just looking for a good gaming experience. The most difficult challenge for Nintendo will be the fact that most people are already carrying a pretty good gaming device around, and asking them to spend $300+ on another portable device they can't fit in a pocket is a big ask. Oh, the Switch is also a home console -- but Sony and Microsoft will be doing all they can to show the Switch is not a great value as a home console compared to their consoles, and they have some very good arguments (price, power, massive software libraries, leading AAA titles) .

The smartphone/tablet competition is the big hurdle the PS Vita could never overcome, and that hurdle has only become higher since then. Ultimately, the Switch market base will never become even a tiny fraction of the smartphone market size, which will limit the Switch's appeal to developers in the long run. The Switch is very important to Nintendo, but its impact on the overall game market will never be very great.

Speaking solely for myself, I had an opportunity to buy a Switch just sort of fall into my lap and I picked it up even though I'm not a Nintendo fan because, well, because I could. :)

The success or failure of the machine is going to boil down to 3rd party support. The machine simply cannot survive on 3-4 Nintendo first party games per year. It needs to have, if not fidelity parity, then at least release parity with the home consoles.

There was rumor of Activision wanting a Destiny sequel on the Switch. It doesn't have to be Destiny 2, the poor little Switch probably couldn't handle Destiny 2, but a Destiny property of some kind would be welcomed, along with any other big 3rd party game.

I don't own Zelda, but Bomberman has been fun, Snipperclips disproportionately stressful for such a tiny game! That egg roll game! Holy cow!

Now they need to keep impressing. Indie games aren't going to do it. Mario Kart will keep the faithful in line, but frankly that's not a game for me. Skyrim is a long way away still.

Switch support requires development of a completely seperate, low spec version akin to the 360 ones that were shut down about two years ago

The price of developing these is likely prohibitive, especially given the established buying patterns of Nintendo fans, who usually own an Xbox or PlayStation. Their online friends are elsewhere, and most would rather spend their money on the best playing version. It's doubtful that enough people are going to be enameled with having portable versions of most games to support development at profitable levels. There's no 360 and PS3 versions to spread it around. The Wii had the same issues, and the WiiU, even during the honeymoon period could sell enough to pay for far more apples to apples ports

Gamestop is having a bad time, and their pimping is very much about their own stockholders, I think it's about them more than it is about the Switch. They had a bad Christmas and need a victory.

This thing is selling into the 3ds audience as well. And because the hardware has more appeal than either the Wii U or 3ds did, I think it's realistic that the Switch does Wii-like numbers if it remains their 1 platform.

1- The Switch is $500 by the time you get out the door. The iPad just went down to $329. Now ask yourself, how many kids, if handed a switch or an IPad wouldn't take the latter? More importantly, the parents that wouldn't buy their kids a $500 iPad aren't droppingthat on switch. Just as 360 numbers are inflated, so are DS by Joey dropping or losing it.

2- Wii was a fad. The vast majority of customers purchased little or no games for it. Switch is not a fad. Grandma is not buying it to bowl. Your sister isn't buying one for Wii fit

So the idea of people buying little to no games couldn't be further from the truth!

Looking at the consoles sales chart also doesn't indicate a fad either. It reached the height of its demand 2 years earlier than PS3/XB360, likely due to the lower price at the time, but nothing in the numbers indicates a fad unless you are privy to some data I'm not.

There is the commonly accepted notion of people buying a Wii and not playing it, but I'd like figures to back that one up!

Edited 1 times. Last edit by Keldon Alleyne on 26th March 2017 10:43am

I don't get this fascination people have with comparing the markets of a phone and a console. The use cases only slightly overlap. Worse still, the device specs do not overlap at all.

Okay, once we get into higher-end tablet range we're on a more level playing field but I still think that the control interaction/mechanisms really and truly separate these devices so much that there is no overlap.

In the same way that you cannot run a VR experience on a traditional 2D display, you cannot transcribe the gameplay of analogue sticks/mouse+ keyboard to a single or multitouch device (or vice versa). Speaking about multitouch, you really have a law of diminishing returns there because you have to support* the device in order to be able to perform those movements. I think that, in the same way the Vita's rear touch panel failed because it was very difficult to actually hold the device and implement the movements to provide control at the same time, the iPad et al. are unable to get away from having someone hold the device with at least one hand while a game is played - they are not physically light devices... Even holding an iPad for a 30 minute to 1 hour Facetime conversation becomes tiring.

At the end of the day, marketing trumps all. (I know it's a cynical viewpoint but it's true!) The perception of the Switch is positive so it will continue to sell in the same way the Wii and PS4 sold to the mass market versus their temporal competitors: Nintendo have won this particular media-focussed round.

Personally, I think the Switch is currently a poor purchase for the consumer - though this depends on how much of a gamer you are. If you owned a WiiU or most of the indie games on offer the Switch makes no sense as a purchase at the price it is being offered at. Going forward, many, many long-standing die-hard Nintendo franchise fans held off on buying both a Wii and WiiU. It seems like a good portion of these fans have been won over by the Switch and the media goodwill claimed by the NES classic. However, there is a warning within this understanding:

Nintendo still appears unable to understand what makes it successful.

As such, I think the Switch's biggest challenge is Nintendo's own notion of its purpose - that of a machine designed to sell nostalgia. If they don't manage to break out of that mould then I see the market cannibalising their sales of third party programmes. With each successive console since the introduction of the Gamecube and original DS I see very little drive forward and a hard reliance on the *old* in order to support the current console.

While revamped Zelda appears to be a good move forward, we also need NEW ideas that can bring the console into its own. Mario and Mariokart are not new and do not appear to be unique in their implementation. Anyone can go out and purchase a WiiU to get those same experiences... along with many other games. There may be a lack of portability... but how special a use case is that?

@keldon I'm talking about the actual consumers. A gigantic percentage of people who bought a Wii bought no games for it, and it went into the closet like pong thirty years prior. Right now Gamestop is yelling about attach rate on Switch. Well yeah. A case, memory card, extra controller and a game and you're already at a 4, compared to the 1 or 2 with PS4.

Also your attach rate includes packin titles. WiiPlay and WiiSports are like 150 million+ by themselves, the former driven hard by Nintendo shorting extra controllers and people buying multiple copies just to get them. Take those out, and count digital sales, and those numbers change drastically. Remove shovelware on the Wii and again it goes down. They moved gobs of those through things like Wal-Mart dump bins for $10 or less on clearance. "Be good Joey and you can have a game!"

@James because Nintendo is competing for weight with people's other devices, and Switch is far less portable than anything else they're likely to be carrying around. How many people do you know lug their laptops, or even a tablet around? A portable that isn't pocketable and requires a special case is losing already. Their primary demo they're advertising to travels light, so thats a factor. The real question is when they find out that the thing stays docked for the vast majority of their customers, will they get smart and "2DS" it with a screenless stationary version (which would likely allow them to sell at around $199 today).

@John because you can't support a modern console on first party. Without a robust flow of income from third party, music, movies, etc, it's hard to keep up. Nintendo doesn't have the ecosystem or media relationships to even begin to get such a thing going, and any outsourcing deal isn't likely to generate them a lot of revenue. Nintendo has Never shown interest in external media, and the ports they've subsidized and outright paid for will likely run out in a year. A console launch costs $2 billion. Maintaining everything from game development to third party support, heck buying your primo shelf space and demo kiosk placement is hugely pricey., which is why Nintendo has been stuck in a corner at Best Buy and other major retailers for years.

@Jordan Lund The success or failure of the machine is going to boil down to 3rd party support. It needs to have, if not fidelity parity, then at least release parity with the home consoles.

I do not agree with this. It needs 3rd party support but not parity. The Wii U launched with some parity to PS3 and X360 and it mattered not. What 3rd party support it needs is differentiated support. Exclusive 3rd party titles that appeal to the audience.

@Jeff Kleist 1- The Switch is $500 by the time you get out the door.

So you're going to add game costs and accessories yet ignore iPad game costs or accessories?

Jeff, Playstation and Xbox have clearance bin games too. In fact games drop in value on Playstation & Xbox much faster than Nintendo platforms and your telling me Sony & MS don't count packin titles with their attach rates?? Man you are changing these goal posts to suit your arguments.

Facts are facts software attach rates were just as high for Wii as they were for PS3 & Xbox 360. I worked in retail during this period and although my experience is specific to my home town the truth is the Wii dominated the console market for years and the DS dominated the handheld market for longer. All evidence points that my experience was similar across the entire industry at the time.

I think Rob hit the nail on the head, that Nintendo have never been good a predicting demand for their product launches. These stories of them with holding stock to create a sense of false demand don't hold. Nintendo are in 3rd place in the console market, they know their last platform lost a lot of ground and they know they need a big positive launch to prove to 3rd parties they are still a relevant platform holder. Playing mind games on consumers is the last thing on the list for them to be concerned about. Nintendo made it clear how much stock they were shipping in the first month, something like 89% of the Japanese shipment was bought up in the first week or so.

@Jeff Kleist: The PS3 attach rate was 4.6, so if we take away 2 units for Wii's launch titles, pretend that 100 million people purchased an extra copy of Wii Sports to get a controller and ignore a further 100 million of those games you still have an attach rate of 4.99 (0.33 more than the PS3 attach rate).

Unless one is harbouring an irrational bias against Nintendo there really isn't a legitimate argument to say that nobody bought Wii games.

1- The "new" customers did not buy games. Thry bowled and Wii fitted and tossed it in the closet.

2- no one bought AAA non-Nintendo audience focused (Just Dance, Lego etc) third party games, which is why they dried up quickly

3- of the games that did sell, a huge percentage was party game shovelware.

4- The attach rate you cite does not take into account digital spending, which was the biggest thing of that generation, which was huge for Xbox and PS3 and virtually nothing for Wii. Just as today PlayStatin fanboys ignore the fact that Xbox owners spend significantly more money than PlayStation.

And when it comes to engagement and time spent on the platform Sony comes dead last. Certainly an important factor for in-game advertising, cross promotions, and other non-game revenue streams.

So as you can see, attach rate doesn't tell the whole story. It's revenue per user that counts, not so much how many doohickeys they walk out of the store with. I remember back in the 90s, if you counted those $5 shareware compilation and Doom WAD discs, my neighbor would have an attach rate of about 50 to their PC without buying a single real game.

I guess Switch must be selling well elsewhere; there was plenty of stock in all the stores I visited this weekend here in Barcelona

From my point of view Switch is not worth a purchase right now, and having a Wii U makes it even more difficult to justify. Most Nintendo fans here bought the Wii U, and are having a hard time figuring out why would they have to spend 329 € + 60€ to play Zelda (the only game worthy of a console launch in the Switch's catalogue) when they can buy that same game on their Wii Us

Unless there is a ton of great Nintendo games and third party support announced at E3, I doubt MK8 and Splatoon will be enough to convince money constrained Nintendo fans. Selling the Wii U and its games (some of which are pretty great) to purchase the more expensive Switch and those same games again? Why would they? The Switch is not offering the promise of better graphics, better online and user friendly functionalities like the PS4 did at launch. Right now the system is completely barebones, and the only worthy title plays and looks the same on both WiiU and Switch. Not a good start at all

@Jim Webb: Spent $20 for my otterbox, basically zero games work with a controller on iPad, and $80 on earbuds? They're included. And even after a case you're walking out for $400. Not that parents are spending that.

Of course, most parents buy junior a DS that if they break won't break the bank , for not much more than the joycons they're going to lose. Hell I'd probably lose.

So I'm a little suspicious of your claims they all just bought nothing. They would have to average an attach rate of 7 at the very least.

4- The attach rate you cite does not take into account digital spending

Let's just say that an attach rate of (IIRC) 6.5 was fine for the PS2, so it's still a stretch to say software sales weren't good. Maybe you could perform an analysis and remove total sales of what you consider to be shovelware party games to produce an attach rate of normal games.

You could even ditch the attach rate and just calculate how much was likely spent on software based on software sales figures if you like if they're not included in Nintendo's official reports.

Now I'm not saying Nintendo has zero issues to resolve, I'm just not seeing a solid analysis in line with figures here. I'm sure first parties had a hard time, mostly because I think they were more likely to buy Wii exclusives and the more graphically gorgeous PS3/XB360 version of cross platform titles.

There were a few casualties of good 3rd party games like Mirror's Edge.